Why You Need a Pour-Over Will

With access to online estate planning forms, putting together a basic estate plan, even if insufficient and misdirected, is relatively easy. One popular option people routinely choose is a revocable trust because of the perceived tax advantages and creditor protections, with the creator retaining control until death. Once he/she passes, the trust reverts to an irrevocable instrument with third-party beneficiaries entitled to the property contained within it according to the terms of the trust. Property held in a trust passes outside probate, the court process of settling and distributing a deceased individual’s estate, which can lead many to believe that a will is unnecessary if a trust is in place. While a trust does provide distinct benefits in a person’s estate plan, it cannot do everything, and a supplemental will, commonly called a pour-over will, is almost always necessary to capture any property outside of the trust at the time of death. This step, from the outside, may appear redundant and unnecessary, but neglecting this step can create a host of problems when the heirs and beneficiaries go to claim their share and interest. A discussion of what a pour-over will actually does, and why it is so important to the smooth transition of property, will follow below.

What Is a Pour-Over Will?

When property is placed in a trust, the original owner is no longer associated with the property, and it comes under the legal control of the trust and trustee who manage it. However, this arrangement only works if a trust is properly funded, an issue that seems simple to resolve, but is often a source of frustrated estate plans when the proper transfers are not made. Pour-over wills exist to avoid this situation, and are structured to automatically transfer any outstanding probate assets into the trust by naming the trust as the sole beneficiary of the probate estate. These assets will still need to go through the probate process, but their distribution is governed by the terms of the trust, and this information remains private and out of court.

Why a Pour-Over Will Matters

Funding a trust is often an imperfect process, and a pour-over will acts to correct any missing pieces to prevent the trust from failing or only distributing a portion of a deceased person’s estate. If the assumption that no will is necessary if a trust is established is followed, any probate property not owned by the trust at the time of the deceased’s death will be distributed according to State intestate law, which passes assets according to marriage and blood ties. This system takes complete control away from the deceased, and defeats the purpose of having an estate plan in the first place. Basically, having a trust supported by a pour-over will ensures the objectives of all estate documents remain in sync and that one document will control the distribution of assets. At the very least, a pour-over will can stand as a backup to the trust, in case it is invalid for some reason.

Trusts may appear to be an easy route to obtain numerous benefits, but they are complicated to set up properly, and not necessary for every individual seeking to establish an estate plan. An experienced estate planning attorney should be consulted about one’s goals and wishes, and most importantly, existing assets and family structure, to determine if this option is useful in a given situation.

Speak with a Florida Estate Planning Attorney

Providing for your family after death is the last act anyone can make to leave a lasting legacy. If you have questions about establishing or reviewing an existing estate plan, talk to William Rambaum about your concerns. He understands how crucial these decisions are, and will bring more than thirty years of experience to assess the best options for your situation. Contact William Rambaum in Oldsmar today to schedule an appointment.